REG - Cadence Minerals PLC - Sale of Yangibana JV Interest to Hastings

Cadence MineralsAnnouncement

23/06/2022 07:00

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RNS Number : 8797P  Cadence Minerals PLC  23 June 2022

Cadence Minerals Plc

("Cadence Minerals", "Cadence" or "the Company")

 

Cadence Agrees To Sell its Yangibana Joint Venture Interest to Hastings
Technology Metals

 

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to announce that it
has entered into a binding agreement to sell its working interests in the
Yangibana Rare Earths project ("Yangibana Project") tenements to Hastings
Technology Metals (ASX: HAS) ("Hastings"). Cadence's 30% interest in tenements
covers a small portion of Yangibana and potentially represents one year of the
16-year mine life.

 

Highlights

 

•    Cadence has agreed to sell its 30% working interest in the Yangibana
Project tenements to the operator and owner of the remainder of the Yangibana
Project, Hastings, for A$9 million (£5.1 million)

·   The sale is to be satisfied by the issue of fully paid ordinary
Hastings shares

·   This transaction provides Cadence with equity exposure to 100% of the
Yangibana Project via its equity holding in Hastings.

·   The NPV of the Yangibana Project is currently AS$ 1 billion

 

Background

 

The interests will be sold for A$9.0 million to be settled by the issue of
fully paid ordinary shares in Hastings at a price to be determined based on 30
days VWAP before completion, which is set at six months from the date of
signing of this agreement. The commercial terms are summarised below.

 

As a consequence of the acquisition, Cadence will become a shareholder of
Hastings. Hastings is developing the Yangibana Project. The Yangibana Project
is a significant Australian Rare Earths Project, containing substantial
Neodymium and Praseodymium resources.

 

The Yangibana Project currently covers approximately 650 square kilometres
containing some 9 Mining Leases, 2 Prospecting Licenses and 19 Exploration
Licenses. Cadence holds a 30% interest in 3 Mining Leases and 6 Exploration
licenses. These tenements contain 0.70 million tonnes of Ore Reserves, which
can increase the expected mine life of the Yangibana Project by approximately
one year to a total of 16 years.

 

Hastings has commenced site construction and is planning to commence
commissioning of the beneficiation plant in late 2023, with the delivery of
maiden production to key customers in 2024.

 

In February of this year, Hastings published a revised NPV calculation, which
increased the NPV by 84% to AS$ 1 billion. Hasting's current market
capitalisation is circa A$ 415 million. Also, in February, the Australian
Government's Northern Australia Infrastructure Facility (NAIF) approved a $140
million loan facility to Hastings and Yangibana, making it the first
Australian rare earth project to receive NAIF funding. The Financial Times
also commented on the story. The link can be found here:
https://www.ft.com/content/552274c4-221a-49ac-91dd-562c51655e76
(https://www.ft.com/content/552274c4-221a-49ac-91dd-562c51655e76)

 

Cadence CEO Kiran Morzaria commented: "The sale of our 30% interest in a part
of the Yangibana Rare Earths Project provides Cadence with an excellent return
on its initial investment and equity exposure to the entire project.
Yangibana's importance as a key REE resource today cannot be overstated."

 

We look forward to reporting on Hastings development and progress towards
production as construction on the mine commences."

 

Commercial Terms

 

The following represent the key binding commercial terms for Hastings to
acquire the 30% working interest in certain tenements and general-purpose
licences held by Cadence Minerals Plc through its subsidiary Mojito Resources
Limited:

 

• Consideration - A$9 million to be settled by the issue of fully paid
ordinary shares in Hastings Technology Metals Ltd (herein referred to as
"Consideration Shares").

• Issue price - equal to the volume-weighted average price (VWAP) of the
Hastings shares in the 30 trading days before settlement.

• Escrow - the Consideration Shares will be subject to a voluntary escrow
for up to 12 months from issue

• Conditions precedent limited to execution of documents to give effect to
the binding term sheet, Hastings having issued and applied to the ASX for the
quotation of the Considerations Shares and any necessary approvals being
received.

• Settlement to occur five days after conditions precedent have been met.

• Conditions precedent to be completed within 180 days; otherwise, either
party may terminate the binding term sheet.

• General representations, warranties and indemnities for an agreement of
this nature.

 

The net loss attributable to our 30% holdings in the tenements for 31 December
2021 is nil. As such, the net loss attributable to the Company is also nil. As
of 31 December 2021, the total carrying values of the tenements in the
Company's balance sheet was approximately £905,000. Based on the transaction
announced, the initial profits on the sale of our interest is approximately
£4.2 million.

 

As outlined above, the Consideration Shares will be subject to a voluntary
escrow of up to 12 months from issue. During that time, the price of Hastings
public equity may vary and result in either higher or lower profitability.
After the lapse of the escrow arrangement, Cadence will retain or dispose of
these shares as per our investment strategy, which is available here
(https://www.cadenceminerals.com/about/strategy/) .

 

Q&A with Vox Markets,

 

CEO Kiran Morzaria will be recording an investor presentation and Q&A with
Vox Markets, which will be released on Friday, 1 July 2022.

 

Shareholders and investors are invited to submit their questions to Katrina
Perez at Vox Markets via her email at kperez@voxmarkets.co.uk
(mailto:kperez@voxmarkets.co.uk) .  The questions should arrive no later than
6 pm on  Wednesday, 29 June 2022. Any that arrive after the deadline will not
be included in the Q&A.

 

 

 

 

 

- Ends -

 

 For further information:

Cadence Minerals plc
                         +44 (0) 7879 584153
 Andrew Suckling
 Kiran Morzaria

 WH Ireland Limited (NOMAD & Broker)                                      +44 (0) 207 220
                      1666
 James Joyce
 Darshan Patel

 

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information
contained in this announcement. Kiran holds a Bachelor of Engineering
(Industrial Geology) from the Camborne School of Mines and an MBA (Finance)
from CASS Business School.

 

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be
forward-looking statements. Forward-looking statements are identified by
their use of terms and phrases such as ''believe'' ''could'' "should"
''envisage'' ''estimate'' ''intend'' ''may'' ''plan'' ''will'' or the negative
of those variations or comparable expressions including references to
assumptions. These forward-looking statements are not based on historical
facts but rather on the Directors' current expectations and assumptions
regarding the Company's future growth results of operations performance future
capital and other expenditures (including the amount. nature and sources of
funding thereof) competitive advantages business prospects and opportunities.
Such forward-looking statements reflect the Directors' current beliefs and
assumptions and are based on information currently available to the
Directors.  Many factors could cause actual results to differ materially from
the results discussed in the forward-looking statements including risks
associated with vulnerability to general economic and business conditions
competition environmental and other regulatory changes actions by governmental
authorities the availability of capital markets reliance on key personnel
uninsured and underinsured losses and other factors many of which are beyond
the control of the Company. Although any forward-looking statements contained
in this announcement are based upon what the Directors believe to be
reasonable assumptions. The Company cannot assure investors that actual
results will be consistent with such forward-looking statements.

 

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

 

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